Prescription drugs are too expensive. Emptying our patent system is not the way to lower prices.
As a former Democratic congressman, I am appalled to see some members of my party supporting policies that would directly hurt unionized workers – the backbone of America and one of our most important constituencies.
The latest example: This summer, a group of 100 Democratic lawmakers led by Senator Elizabeth Warren called on federal authorities to effectively revoke patent protections on a handful of common prescription drugs. This would allow generic drug makers to start creating cheaper copies.
Reducing the cost of drugs is an admirable goal, but gutting our patent system is not the way to go. This would stifle investment in the biotech industry and all other sectors that depend on strong intellectual property protections. Such a move would threaten the jobs of hundreds of thousands of workers in these industries, including many skilled union jobs.
High-tech manufacturing jobs – particularly in the biotechnology sector – are a key source of employment for unionized workers. From 2015 to 2020, unionized workers logged more than 22 million hours and earned $774 million in wages from their work in biopharmaceutical research and manufacturing facilities in just 14 states. During this period, the demand for construction workers in the biopharmaceutical industry jumped 50%.
But the demand for unionized construction workers can only continue if the industry needs new facilities. And they will only need new facilities if they develop new treatments.
Patent protections make the search for new treatments attractive. The average cost of creating a new drug is nearly $3 billion by some estimates, and nearly 90% of new drugs never make it to market. Patents help companies recover their investment costs by bringing to market the few new drugs that cross the finish line. Essentially, patents are the reason corporations can make risky bets on potentially life-saving cures and invest in American manufacturing that creates union jobs.
Senator Warren and her colleagues want to overhaul the US patent system. They plan to twist the meaning of a bipartisan law, known as the Bayh-Dole Act, aimed at revoking drug companies’ patent licenses for drugs partially derived from federally funded research. Then the federal government could theoretically re-license those patents to generic drug makers, who would produce the drugs at a lower cost.
But Congress passed Bayh-Dole to spur innovation, not chill it. When it first came on the books in 1980, universities and other research institutes did not automatically retain patent rights for their inventions which stemmed in part from federal grant funding. Instead, the federal government retained those patent rights. And it rarely licensed patents to the private sector.
As a result, too many taxpayer-funded ideas have sat on the shelf, rather than being developed into real-world products.
Bayh-Dole solved this problem by allowing universities to retain patents on their researchers’ inventions and license those inventions to companies that could turn them into marketable products.
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Bayh-Dole allows the government to “step in” and renew these patents, but only in limited circumstances, including when the patent holder fails to commercialize the idea. The law was never intended to let Uncle Sam take away patent licenses just because some members of Congress think the price of patented products – in this case, drugs – is too high.
Even if Senator Warren’s plan were legal, unionized workers would be worse off. That is why union leaders recently issued a resolution opposing the misuse of marching rights and reaffirming the original meaning of Bayh-Dole.
As we approach midterm, I hope my fellow Democrats will stop threatening to upend the intellectual property system that sustains so many unionized jobs. By all means, we must work to make medicines more affordable by cracking down on intermediaries such as pharmacy benefit managers, who pocket billions of dollars in patient rebates. But turning a law meant to spur innovation into one that crushes companies’ desire to license promising ideas would do far more harm than good.
Ron Klink served four consecutive terms representing Pennsylvania’s 4th congressional district.